What is the impact of problem loans on Japanese bank productivity growth?

This paper examines for the first time the impact of problem loans on Japanese productivity growth. We exploit a new data set of Japanese problem loans classified into two categories: bankrupt and restructured loans. We opt for a novel and flexible productivity growth decomposition that allows to measure the direct impact of these problem loans on productivity growth. The results reveal that Japanese bank productivity growth was severely constrained by bankrupt and restructured loans early in 2000s, whilst some persistence of the negative impact of problem loans on productivity growth is observed in the late 2000s. Thereafter, there is only some partial recovery in the productivity growth from 2012 to 2015. Further, we also perform cluster analysis to examine convergence or divergence across regions and over time. We observe limited convergence, though Regional Banks seem to form clusters in some regions.     

Convergence across American and Korean young adults: socialisation variables indicate the verdict is still out

A study was undertaken to examine consumer socialisation variables among Korean and American young adults. Many studies have been undertaken that focus on American consumers and the consumer socialisation process, but very few cross-cultural studies exist on this topic. However, efforts are increasing to suggest that consumers are converging on a global scale and research is needed to adequately assess the reality of these claims. Specifically the research explored Korean and American consumers’ media use patterns and the believed importance of different agents (media and interpersonal) for consumption-related information. The study also examined the relative importance of social structural variables on consumers’ perceived influences of key socialisation agents. Results indicate that American and Korean consumers are quite similar in how they allocate their time across media. Both groups spent the most time with television and the internet. However, differences were evident in the perceived importance of information sources, as well as the influence of socialisation agents when making purchase decisions. These differences do call into question the ability of standardised advertising campaigns and the ability to present one strategy to a unified global target market. Implications for advertisers and consumer researchers are provided.     

Secrecy of Bank of Japan’s Yen intervention: Evidence of efficacy from intra-daily data

This paper examines the intraday effectiveness of the Bank of Japan (BOJ)’s foreign exchange interventions over the period May 13, 1991–March 16, 2004. The existing literature has generally failed to provide a comprehensive study on the effects of the BOJ’s interventions, and particularly, the efficacy of public and secret operations. By dividing a 24-h trading day into three horizons, we show that the intraday evidence on the effects of official interventions documented in prior studies primarily came from publicly known interventions. In the case of secret interventions, although there were no clear impacts on the first moment of exchange rate returns, we found significant second moment responses. Specifically, covert operations were able to reduce the Yen/USD return volatility during both Tokyo and subsequent overnight market hours. Furthermore, our extended model on secret interventions reveals that when the BOJ completely concealed its transactions, undetected interventions were shown to be most effective in both reversing undesired trends and reducing excess return volatilities. On the other hand, those interventions that were rumoured were not as effective. Finally, the interventions conducted during the periods of ‘oral interventions’ were in general more effective in moving the exchange rate in the desired direction.     

Corporate tax cuts,merger activity,and shareholder wealth

We study the impact of the Domestic Production Activities Deduction (DPAD) on mergers and acquisitions. DPAD reduces corporate tax rates on income from work or goods made in the U.S. Results indicate that the quantity and quality of acquisition bids by DPAD-advantaged firms conform to the predictions of the neoclassical theory of the firm and the theory of financial constraints. Specifically, bids, particularly those cash-financed, increase substantially in industries with large DPAD-related tax cuts and for firms with financial constraints. Moreover, DPAD improves acquisition quality where acquirers and targets are likely to generate incremental DPAD tax benefits through their merger.     

Falling Wage Shares in Europe and the United States: How Important is Aggregation Bias?

This paper sheds light on the importance of aggregation bias in the analysis of wage shares developments over time and across countries. We focus on five European countries and the United States and show that the trend decline in the aggregate wage share observed in these countries over much of the 1980s and 1990s partly reflects changes in the sectoral composition of the economy. The application of a fixed-weight aggregation method changes the profile of the observed wage share in a significant way: in particular there is no longer sign of an overshooting of the wage share levels of the early-1970s. Error-correction wage equations based on the adjusted wage shares generally have a better regression fit and show long-run elasticities of real wages to unemployment that vary less across countries and are substantially lower than those obtained with observed shares.     

Consequences of Economic Partnership Agreements between East and Southern African Countries and the EU for Inter- and Intra-regional Integration

Abstract

The European Union is currently negotiating Economic Partnership Agreements (EPAs) with six African, Caribbean and Pacific country groupings, aiming at establishing mutual free trade. This paper empirically assesses the impact of the EPAs on trade flows and government revenues for 22 East and Southern African countries and discusses implications for intra-regional integration. The results indicate that while moderate trade effects can be expected, relatively large budget effects are likely to occur in a number of these countries, exposing them to considerable structural and financial adjustment requirements. In addition, EPAs would strengthen the need to consolidate overlapping intra-regional integration schemes.     

Economic freedom in the long run: evidence from OECD countries (1850–2007)

This article presents historical indices for the main dimensions of economic freedom and an aggregate index for the developed countries of today, specifically pre‐1994 OECD members. Economic liberty expanded over the last century‐and‐a‐half, reaching more than two‐thirds of its possible maximum. However, its evolution has been far from linear. After a substantial improvement from the mid‐nineteenth century, the First World War brought a major setback. The postwar recovery up to 1929 was followed by a dramatic decline in the 1930s. Significant progress took place during the 1950s but fell short of the pre‐First World War peak. After a period of stagnation, steady expansion since the early 1980s has resulted in the highest levels of economic liberty of the last two centuries. Each of the main dimensions of economic freedom exhibited a distinctive trend and its contribution to the aggregate index varied over time. Overall, improved property rights provided the main contribution to the long‐run advancement of economic liberty.     

政府公共服务的企业化改革

传统政府治理中的一个误区是忽视服务提供和服务主体之间的区别，进而错误地认为如果政府放弃了服务生产者的功能，它自然就放弃了服务提供者的角色。政府的自信甚至自负导致公共物品垄断性的直接生产模式，它所伴随的高成本，低效率，质量不尽人意和回应性的缺乏，不仅损坏了公众对政府的信任，而且无端耗费了公共资源，导致普遍的低效。     

The surprising benefits of a parallel universe

Suppose that the successful completion of a project requires performing n tasks, each of which has a probability of success p. The paper establishes under what conditions it may be profitable to engage in parallel multi‐tasking, i.e. tackling each task by following two independent routes. It is found that for ?n>1 parallel multi‐tasking is profitable for a wide range of parameters when costs are linear and is always profitable for convex costs. Copyright © 2008 John Wiley & Sons, Ltd.     

HEATH–JARROW–MORTON INTEREST RATE DYNAMICS AND APPROXIMATELY CONSISTENT FORWARD RATE CURVES

We study a finite-dimensional approach to the Heath–Jarrow–Morton model for interest rate and introduce a notion of approximate consistency for a family of functions in a deterministic and stochastic framework. This amounts to asking the decrease of the minimum distance in least squares sense. We start from a general linearly parameterized set of functions and extend the theory to a nonlinear Nelson–Siegel family. Necessary and sufficient condition to have approximately consistency are given as well as a criterion of stability for the approximation.